Telecom industry 27, 28, 63

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Telecom industry 27, 28, 63

  1. 1. Telecom Industry-India<br />Presented by<br />L Nikhil Reddy – 10810027<br />Laxmi Narasimha Boddu – 10810028<br />SwagatPatra – 10810063<br />
  2. 2. Flow of the presentation<br />Telecom Industry Overview<br />1<br />Telecom – Investment Attracting Sector<br />2<br />3<br />Regulatory Framework and Its Impact<br />4<br />Emerging Trends in Telecom Market<br />5<br />Major Players in Telecom Sector<br />6<br />SWOT Analysis<br />
  3. 3. Flow of the presentation<br />Telecom Industry Overview<br />1<br />Telecom – Investment Attracting Sector<br />2<br />3<br />Regulatory Framework and Its Impact<br />4<br />Emerging Trends in Telecom Market<br />5<br />Major Players in Telecom Sector<br />6<br />SWOT Analysis<br />
  4. 4. Fast facts<br /><ul><li>Indian telecom market is one of the fastest growing markets in the world.
  5. 5. With its 806 million telephone connections as on 28thFeb 2011, it is the second largest network in the world after China.
  6. 6. It is the second largest wireless network in the world.
  7. 7. Over 15 million connections are being added every month.
  8. 8. The target of 600 million telephones by the end of 11th five year plan has been achieved in February 2010 itself.</li></ul>Souce: Cellular operators association of India, TRAI, DoT<br />
  9. 9. Fast facts<br /><ul><li>Wireless telephones are increasing at faster rate. The share of wireless telephones as on 31st December 2010 is 95.54% of the total phones.
  10. 10. The share of private sector in total telephone is 84.6%.
  11. 11. Overall tele-density has reached 66.17%. Urban tele-density is about 148%, whereas rural tele-density is at 31.22%, which is also steadily increasing.
  12. 12. Broadband connections increased to 10.74 million by November, 2010.</li></ul>Souce: Cellular operators association of India, TRAI, DoT<br />
  13. 13. Overview<br />Services offered by the telecom industry<br />
  14. 14. Structure of Indian telecom industry<br />
  15. 15. Tele-density – Number of telephones per 100 people or population (source: DoT)<br />
  16. 16. Wireline v/s wireless(souce: DoT)<br />Privatev/s public (source: DoT)<br />
  17. 17. Telecom Industry Overview<br />1<br />Telecom – Investment Attracting Sector<br />2<br />3<br />Regulatory Framework and Its Impact<br />4<br />Emerging Trends in Telecom Market<br />5<br />Major Players in Telecom Sector<br />6<br />SWOT Analysis<br />
  18. 18. India – An ideal destination for investments in telecom sector<br /><ul><li>World’s largest democracy
  19. 19. Independent judiciary
  20. 20. Among the countries offering the highest rates of return on investment
  21. 21. Skilled and competitive labour force
  22. 22. Fifth largest telecom network in the world; second largest among the emerging economies after China
  23. 23. On an average, about 14-15 million new users added per month, making India the world’s fastest growing wireless services market</li></li></ul><li>Investments (continued)<br /><ul><li>Liberal Foreign Investment Regime–FDI limit increased from 49 percent to 74 percent; the rural telecom equipment market is also open to large investments
  24. 24. The large untapped potential in India’s rural markets–31.2 percent teledensity in rural markets as compared to the urban level of 147 percent
  25. 25. The government promoting telecom manufacturing by providing tax sops and establishing telecom specific Special Economic Zones
  26. 26. Fully repatriable dividend income and capital invested in telecom equipment manufacturing</li></li></ul><li>Investments (continued)<br />Low tele-density (depicting large untapped potential)<br />Large number of additions in the telecom subscribers<br />+<br />=<br />Telecom advantage<br /><ul><li>Not only the service provider companies (like Aircel and MTS), but the telecom equipment companies and the handset manufacturing companies can look forward to invest in India, given the continued explosive growth of the number of subscribers.
  27. 27. Telecom equipment companies – Cisco, Avaya, Qualcom, Motorola
  28. 28. Handset manufacturing firms – Nokia, Samsung, Motorola, LG, Micromax, Panasonic etc.</li></li></ul><li>Telecom Industry Overview<br />1<br />Telecom – Investment Attracting Sector<br />2<br />3<br />Regulatory Framework and Its Impact<br />4<br />Emerging Trends in Telecom Market<br />5<br />Major Players in Telecom Sector<br />6<br />SWOT Analysis<br />
  29. 29. Regulatory Framework provides level playing field for all operators<br /><ul><li>The Department of telecommunications (Government of India) is the main governing body for the industry. It is the main body formulating laws and various regulations for the Indian telecom industry.
  30. 30. Telephone Regulatory Authority of India (TRAI) assists the Government of India (GoI) to take timely decisions and introduce new technologies in the country.
  31. 31. The telecom Dispute Settlement and Appellate Tribunal (TDSAT)</li></li></ul><li>Telecom Industry Framework<br />
  32. 32. Telecom Industry Overview<br />1<br />Telecom – Investment Attracting Sector<br />2<br />3<br />Regulatory Framework and Its Impact<br />4<br />Trends in Telecom Market<br />5<br />Major Players in Telecom Sector<br />6<br />SWOT Analysis<br />
  33. 33. The Indian Mobile Industry : Cause & Effect<br />Private players were allowed in Value Added Services<br />ILDservices was opened to competition<br />Intra-circle merger guidelines were established<br />Independent regulator, TRAI, was established<br />Number portability was proposed<br />Calling Party Pays (CPP) was implemented<br />BSNL was established by DoT<br />Attempted to boost Rural telephony<br />Number portability<br />Go-ahead to the CDMA technology<br />1999<br />2010<br />1994<br />2002<br />2005<br />2003<br />2004<br />2006<br />2000<br />1992<br />1997<br />Internet telephony initiated<br />2011<br />Broadband policy 2004 was formulated—targeting 20 million subscribers by 2010<br />Decision on 3G services (awaited)<br />FDI limit was increased from 49 to 74 percent<br />NTP-99 led to migration from high-cost fixed license fee to low-cost revenue sharing regime<br />Reduction of licence fees<br />National Telecom Policy (NTP) was formulated<br />Reference Interconnect order was issued<br />
  34. 34. 19<br />Lowering of ADC<br />3rd & 4th Cellular Operator<br />16<br />180<br />157.58<br />14<br />14<br />160<br />14<br />140<br />12<br />NTP-99<br />120<br />10<br />100<br />96.63<br />Effective Charge (Rs/min)<br />Subscriber Figures (in mn)<br />8<br />80<br />6<br />6<br />60<br />51.53<br />3.58<br />4<br />Reduction in License Fee<br />40<br />33.31<br />2<br />1.6<br />2<br />20<br />0.44<br />0.44<br />0.4<br />13<br />0.32<br />6.5<br />3.58<br />1.88<br />0.88<br />1.2<br />0<br />0<br />2001<br />2002<br />2003<br />2004<br />2005<br />2006<br />1998<br />1999<br />2000<br />2007<br />Year ended March<br />Revenue Share ADC Regime<br />CPP Introduced<br />Lowering of ADC<br />The Indian Mobile: Cause &effect<br />Introduction of CDMA<br />Source: TRAi and COAI<br />
  35. 35. Indian Consumer gets the worlds lowest mobile tarrifs<br />
  36. 36. Highest minutes of usage<br />
  37. 37. Telecom Centers of excellence in ‘PPP’ mode<br /><ul><li>India needs TCoEs’ </li></ul>Capacity Building to sustain the explosive Growth<br />Benchmarking global best Technologies and Practices<br />Prepare for Mobile Info Security, Next Generation Networks, Disaster Management services etc<br />Plan a National Information Infrastructure to make India a leading Mobile Information Society<br />Innovate actions for bridging Digital Divide<br />To undertake India specific content & applications development<br /><ul><li>Concept Genesis in 2006, SEVENTCoEs’ created in 2007-2008!!...</li></li></ul><li>The CoEs<br />
  38. 38. Shared Infrastructure<br />Project “MOST” – Mobile Operators Shared Tower<br />Kick started infra-sharing in India and demonstrated proof of concept of the possibility of multi-technology (GSM & CDMA) and multi operators (upto 6 operators) sharing a single tower<br />Unique USOF Scheme to Incentives setting up of Shared Passive Infrastructure in Rural Areas:<br />Subsidy for setting up and managing 7871 towers in 500 districts spread over 27 states.<br />Subsidy proposed for another 11,000 towers in the Second Phase.<br />‘Guidelines on Infrastructure Sharing’ announced on April 01,2008<br /><ul><li>Active Infrastructure Sharing Permitted
  39. 39. Procedures/Policies Streamlined</li></li></ul><li>25<br />Much achieved, but you ain’t seen nothing yet!!!<br />Million<br />
  40. 40. Telecom Industry Overview<br />1<br />Telecom – Investment Attracting Sector<br />2<br />3<br />Regulatory Framework and Its Impact<br />4<br />Emerging Trends in Telecom Market<br />5<br />Major Players in Telecom Sector<br />6<br />SWOT Analysis<br />
  41. 41. Players of Industry<br />Other Payers:<br /><ul><li>Hexacommm
  42. 42. Escotel
  43. 43. Spice
  44. 44. BPL
  45. 45. MTNL
  46. 46. Uninor
  47. 47. Virgin
  48. 48. MTS</li></ul>15 Players in the industry as of Sep 2010<br />
  49. 49. Telecom Industry Overview<br />1<br />Telecom – Investment Attracting Sector<br />2<br />3<br />Regulatory Framework and Its Impact<br />4<br />Emerging Trends in Telecom Market<br />5<br />Major Players in Telecom Sector<br />6<br />SWOT Analysis<br />
  50. 50. Strengths<br />High Customer Potential<br /><ul><li>Tele-density grew from 48% in 2005 to 64% in 2010.
  51. 51. Significant growth of broadband subscriber.</li></ul>High Growth Rate<br /><ul><li>Wireless subscriber growing at the rate 60% per annum.</li></ul>Allow FDI limit ranging from 74% to 100%.<br /><ul><li>The total FDI equity inflow in telecom sector have been US$2223 million during 2010.</li></ul>High Return on Investment.<br /><ul><li>Easier to create economies of scales thereby increasing the return on investment.</li></ul>Liberalization of Government.<br /><ul><li>The share of the private sector in the telecom sector is 88.6% and </li></ul>Lower capital expenditure.<br /><ul><li>The Indian Telecom Industry is a high density area, which means more population per tower. This means less capital expenditure.</li></li></ul><li>Weakness<br />Poor Telecom Infrastructure.<br /><ul><li>Resulting in large call drops.</li></ul>Late Adopters of New Technology.<br /><ul><li>India is among the last countries to adopt 3G technology. Recent reports suggests that already 132 countries in the world has already adopted 3G.</li></ul>Most competitive market.<br /><ul><li>10 to 12 companies offer mobile services in most parts of India.</li></ul>A market strongly regulated by Government.<br />Difficult to enter because of huge financial resources.<br /><ul><li>Auction of 3G license has reached Rs 15814.15 crores</li></li></ul><li>Opportunity<br />3G Telecom service and 4G service.<br />More quality service.<br />Value added service.<br /><ul><li>SMS, ringtones, mobile tv, video streaming, mobile banking, mobile ticketing etc.</li></ul>Boost to Telecom manufacturing companies.<br /><ul><li>Production of telecom equipments from Rs 4,12,700 million (2007-08) to Rs 6,75,000 million (2009-2010).</li></ul>Horizontal integration.<br /><ul><li>Entry into other consumer segments . For example Reliance BIG TV, TataSky, Airtel Digital TV</li></ul>Providing fibres connectivity to 2,50,000 village panchayats by 2012.<br />
  52. 52. Threats<br />Telecommunication Policies.<br /><ul><li>Renewal of 2G license on the basis of market rate of 3G
  53. 53. TRAI’s intention of rolling out 4G technology, known as the ultra-broadband in 2-3 years raising fears rendering 3G services somewhat obsolete.</li></ul>Declining ARPU(Average Revenue per user).<br /><ul><li>Price wars like per second billing which is deflating revenues and making sure the survival of the fittest.</li></ul>Partiality on the part of Government.<br /><ul><li>E.g Allowing 3G services in a PSU(MTNL,BSNL) before auctioning to private sector.</li></li></ul><li>Conclusion & Recommendation<br /><ul><li>In this cut throat competition the winner will be that company that understands consumer needs focusing on usability and giving control to the users .
  54. 54. The losers are ones that focus on technical differentiation that majority of consumers do not understand.
  55. 55. Future strategy which can make one to be a leader are competitive tariff plans ,VAS and focus on rural markets.</li>

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